It's Payback Time

Governor Mitch Daniels has ordered the remaining money owed to local government be repaid by the end of the month, a full year ahead of schedule. This completes a payback program that Daniels started in 2006 to repay local government and schools money that was withheld starting in 2002 to "balance" the state's budget. This would be a rough equivalent to you withholding payment to the phone company so you can pay your credit card and tell people you don't have any debt. That's the way the State of Indiana used to work, but not anymore.

INDIANAPOLIS (May 16, 2008) – Governor Mitch Daniels today ordered that the remaining $212 million long owed to local governments be repaid by the end of May, a year ahead of schedule.

“As the only state in the Midwest that is in the black fiscally, we’re being extremely careful about every dollar. But the very strong March and April revenues strengthen our confidence that we will register a fourth straight surplus this year, and that we can accelerate this final repayment of the debts the state once owed to schools and towns,” said Daniels. “With this year’s property tax cuts, we’ve entered a new era of taxpayer protection. We know there will be an adjustment period for local taxing units and want to do all we can to help.”

During an extended period of deficit spending, starting in 2002, state government delayed payments totaling $761 million to K-12 schools, higher education and local governments.